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India’s version of Google tax, or the equalisation levy, may now be applicable in Jammu & Kashmir. With Parliament passing a Bill to revoke Article 370, digital commerce operators advertising on global social media, which earlier did not pay Google tax on their operations in Jammu & Kashmir, may now have to cough it up at 6 per cent.  According to people across companies, firms such as Facebook, Google, Amazon and Flipkart, among others, are all trying to figure out various tax implications of the government’s move.  “We are assessing if we need to start paying additional taxes, and also if we have to change our accounting strategies. This will take a few weeks as the government has just made the announcements. We will get a better idea after we have a meeting with the tax department in Jammu & Kashmir,” said a senior management member at one of the biggest e-commerce firms.  Industry experts believe the equalisation levy is something that may be applicable ...

India's central bank is poised to deliver its fourth successive quarter-point interest rate cut on Wednesday, amid calls from investors and the government for further easing as a slowdown gripping the economy becomes more pervasive. The Reserve Bank of India will lower the benchmark repurchase rate by 25 basis points to 5.5 per cent, according to almost all of the 36 economists surveyed by Bloomberg. Swap markets are pricing in at least another 50 basis points of reductions before the end of 2019.  Finance Minister Nirmala Sitharaman has ratcheted up pressure on the six-member monetary policy committee for a "significant cut" to lift economic growth from a five-year low. Inflation that's stayed below the central bank's 4 per cent medium-term target for 11 months in a row and the Federal Reserve's first rate cut since the financial crisis allows room to retain the policy makers' easing bias. A quarter-point cut will take the benchmark rate to the lowe...

The Reserve Bank of India (RBI) has tightened the fit-and-proper criteria for directors on the boards of state-run banks, and said the Centre’s nominee director shall not be part of the nomination and remuneration committee (NRC). The revised criteria also, for the first time, laid down an exhaustive list for the disqualification of directors.  The terms with regard to the NRC and the manner of the appointment of directors have been aligned with the practice in private banks, the recommendations made by the Banks Board Bureau, and with the provisions in the Companies Act.  While the revised norms are applicable only to public sector banks (PSBs), separate guidelines for private banks and non-banking financial companies (NBFCs) may be in the offing. The NRC will have a minimum of three non-executive directors from amongst the board of directors. Of this, not less than one-half shall be independent directors and should include at least one member from the risk management com...

The Securities and Exchange Board of India (Sebi) has received a string  of recommendations from its working group on tightening the regulatory framework for the portfolio management service (PMS) industry.  One of the proposals pertains to increasing net worth requirement of PMS players to Rs 50 million.  Some of the other proposals involve improving the reporting disclosures, high exit-loads in PMS products and improving the overall industry standards.  The working group commissioned by the Sebi said higher net worth requirement would deter non-serious players while seeking registration and also put pressure on the fringe players. It observed that it has been over 10 years since the net worth requirement was last revised from Rs 5 million to Rs 20 million. However, the focus of the working group’s recommendations was to improve disclosures in the PMS industry, make it more investor-friendly and less expensive for investors.  The working group also took repre...

Capital markets regulator Sebi slapped Rs 94.5 lakh penalty on 17 entities for indulging in fraudulent trade practices in illiquid stock options segment on the BSE.  The regulator, during the course of investigation between April 2015 and September 2015, found that 81.38 per cent of all the trades executed in the stock options segment involved reversal of buy and sell positions by the clients and counter-parties in a contract on the same day.  These entities were among those "whose reversal trades involved squaring off transactions with significant difference in sell value and buy value of the transactions," Sebi said in similarly worded separate orders on Friday.  It further said trades of the entities are non-genuine as they are not executed in normal course of trading, lack basic trading rationale, lead to misleading appearance of trading in terms of generation of artificial volumes, and are hence deceptive & manipulative.  By indulging in such trades, the e...

Reserve Bank of India Governor Shaktikanta Das has expressed concern over the impact of stressed trade negotiations and rising geopolitical tensions on global economy while backing the building up of forex reserves by emerging economies as safeguard against global contagion.  The balance in global economic order has already seen marks of stress with low interest rate policies followed by advanced economies over a period.  “International coordination has become somewhat weaker in the very recent years. Many advanced economies have been pursuing low interest rate policies for long, perhaps without adequate recognition of their adverse impacts,” Das said.  “Solutions are turning more difficult to come by as the global economy seems to be moving into a new and unsettling phase in an environment of stressed trade negotiations, rising geopolitical confrontation, limited policy space and high debt levels in several economies. General government debt of advanced economies as a ...

Market regulator, the Securities and Exchange Board of India (Sebi), has expanded the horizon of all compulsory delivery contracts under staggered delivery, a move that aims to reduce price manipulation and improve liquidity on commodity exchanges.  Sebi has also cut the minimum staggered delivery period to five days from the existing 10 days, leaving the discretion of fixing the higher number of days on the concerned exchange, depending upon the history of the relevant commodity.  In a circular issued on Friday, Sebi said, “All compulsory delivery commodity futures contracts (agriculture as well as non-agriculture commodities) shall have a staggered delivery period. The minimum staggered delivery period should be five working days”  Staggered delivery period is the period beginning few working days prior to expiry of any contract and ending with expiry, during which sellers / buyers having open position may submit an intention to give / take delivery.  The markets...

Under the scheme, brokers and other intermediaries are given incentives for a specified period to bring in liquidity and generate investor interest in securities, which have limited trading activity Markets watchdog Sebi on Friday eased the conditions for exchanges to provide incentives under liquidity enhancement schemes (LES) in the first five years of operation.  Under the scheme, brokers and other market intermediaries are given incentives for a specified period of time to bring in liquidity and generate investor interest in securities, which have limited trading activity.  The move comes after the regulator noted that "an exchange in early years of its formation or commencement of business may not be able to generate profits or have free reserves from business operations".  Laying down the conditions for such exchanges, Sebi in a circular said the yearly incentive that an exchange can earmark for LES will not exceed 25 per cent of its audited net-worth as on the la...

The general government debt of AEs as a group has surpassed 100 per cent of gross domestic product (GDP), whereas the fiscal space is also constrained in many of these countries  The global economy is moving into a “new and unsettling phase” where “solutions are turning more difficult to come by” in an environment of stressed trade negotiations, rising geopolitical confrontation, and limited policy space and high debt levels in several economies, Reserve Bank of India (RBI) Governor Shaktikanta Das said on Friday.  This has a negative connotation for emerging markets (EMs), as these are building up excessive leverage because of the low interest rates in the advanced economies (AEs). This is especially true in the absence of a strong global safety net such as currency swap arrangements between the AEs and the EMs.  The general government debt of AEs as a group has surpassed 100 per cent of gross domestic product (GDP), whereas the fiscal space is also constrained in many...

The Fifteenth Finance Commission (15th FC) headed by NK Singh is expected to create a defence and internal security fund likely to be called Rashtriya Suraksha Nidhi (RSN) by setting aside money from gross tax revenues of the central government.  The Cabinet cleared enabling approvals on July 17, increasing focus on national security while also indicating it wants states to share the financial burden of maintaining and upgrading its security apparatus, including buying weapons from global suppliers, ET’s conversations with highly placed sources and review of confidential documents reveal.  Although the original terms of reference (ToR) of the 15th FC did ask it to look into the demand on central resources for defence and national security, they had not specifically mandated FC to suggest creation of a fund outside the Consolidated Fund of India. The Cabinet decision to amend ToR came after prolonged discussions between the government and the commission and splitting hairs ov...

The high-level Bimal Jalan panel could hold another meeting before submitting its report on the Reserve Bank of India’s economic framework that will dictate how much of its surplus could be transferred to the government and when. This follows a bureaucratic reshuffle late on Wednesday evening.  “We could hold another meeting as a new economic affairs secretary has been appointed,” said a person familiar with the matter. The call will be taken in some time, the person told ET.  ET had reported that the recommendations of the report weren’t unanimous with Subhash Chandra Garg having dissented. Garg was transferred to the power ministry from his post as economic affairs secretary on Wednesday. The panel favoured periodic transfers of the RBI’s surplus reserves to the government over three to five years, contrary to the government’s expectation of a lumpsum payment.  Any additional fund transfers from the RBI will help the government bridge its fiscal deficit as also meet o...